Caution advised over new milk plant

By James Garner

A SENIOR economist has questioned dairy farmers willingness to invest in new milk processing capacity, saying it is very risky, particularly when there is too much already.

Sean Rickard, senior lecturer at the Cranfield School of Management, said farmers should concentrate on producing quality milk cheaply to meet consumer demands.

His comments come at a time when most of the dairy milk co-ops have opted to acquire or build new milk-processing capacity.

But ploughing money into extra processing capacity would only divert farmers attention and stop them from investing money to improve the efficiency of their own business.

That would not necessarily serve them well, he said.

“Farmers would be better advised to join a producer group that has a partnership alliance with a successful processor.”